[Federal Register: January 12, 2001 (Volume 66, Number 9)]
[Proposed Rules]
[Page 3109-3145]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12ja01-40]
[[pp. 3109-3145]] National Pollutant Discharge Elimination System Permit Regulation
and Effluent Limitations Guidelines and Standards for Concentrated
Animal Feeding Operations
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BILLING CODE 6560-50-C
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3. Energy Impacts
The proposed regulatory options may result in increased energy use
for operations that currently do not capture their runoff or other
process wastewater. These operations would need to capture the feedlot
runoff, divert it to a waste management system, and use this wastewater
for irrigation or dispose of it by some alternative means.
For the land application areas, the proposed regulatory options
assume all CAFOs will apply their manure and wastewater using
agricultural application rates. In many instances this means that
facilities would have to limit the amount of manure applied to the land
which may result in decreased energy usage at the CAFO. However, total
energy requirements for land application increase under all options due
to the increased transportation of waste off-site. Additional energy is
also required to operate composting equipment, and at swine CAFOs to
operate recirculating pumps to reuse lagoon effluent as flush water.
Option 6 includes the use of anaerobic digesters with energy
recovery to manage animal waste for large dairy and swine operations.
Digesters require a continuous input of energy to operate the holding
tank mixer and an engine to convert captured methane into energy. The
energy required to continuously operate these devices, as well as the
amount of energy generated by the system, have been determined from the
FarmWare model, which was also used for estimating compliance costs.
Under Option 6, EPA anticipates a net decrease in electricity use due
to the energy savings from methane recovery.
B. Quantitative and Monetized Benefits
In addition to costs and impacts, EPA also estimated the
environmental and human health benefits of today's proposed
requirements. Benefits identified as a result of this proposed rule are
associated with improvements in water quality.
EPA is not currently able to evaluate all human health and
ecosystem benefits associated with water quality improvements
quantitatively. EPA is even more limited in its ability to assign
monetary values to these benefits. The economic benefit values
described below and in the ``Environmental and Economic Benefits of the
NPDES/ELG CAFO Rules'' (Benefit Report) should be considered a subset
of the total benefits of this rule and should be evaluated along with
descriptive assessments of benefits and the acknowledgment that even
these may fall short of the real-world benefits that may result from
this rule. For example, the economic valuation considers the effects of
nitrogen, phosphorous, pathogens and sediment but does not evaluate the
economic impacts of metals or hormones which can produce significant
adverse environmental impacts.
Within these confines, EPA analyzed the effects of current water
discharges and assessed the benefits of reductions in these discharges
resulting from this proposed regulation. The CAFO industry waste
effluents contain pollutants that, when discharged into freshwater and
estuarine ecosystems, may alter aquatic habitats, affect aquatic life,
and adversely affect human health.
For this proposed rule, EPA conducted four benefit studies to
estimate the impacts of controlling CAFO manure. The first study is a
national water quality model (National Water Pollution Control
Assessment Model) that estimates runoff from land application areas to
rivers, streams, lakes and impoundments in the U.S. This study
estimates the value society places in improvements in surface water
quality associated with the different regulatory scenarios. Another
study examines the expected improvements in shellfish harvesting as a
result of CAFO regulation. A third study looks at incidences of fish
kills that are attributed to animal feeding operations and estimates
the cost of replacing the lost fish stocks. A fourth study estimates
the benefits associated with reduced groundwater contamination. Each of
these studies is described below.
1. Benefit Scenarios
There are eight benefit scenarios under consideration, four
scenarios (1, 2/3, 4a and 4b) using a nitrogen application rate and the
same 4 scenarios using a phosphorus application rate. Scenarios 1 \2/3\
have a three-tiered structure similar to the current rule. Tier 1 is
1,000 AU and greater; Tier 2 is 300--999 AU; Tier 3 is less than 300
AU. Scenarios 4a and 4b have a two-tiered structure. Under Scenario 4a,
Tier 1 is 500 AU and greater; Tier 2 is less than 500 AU. Under
Scenario 4b, Tier 1 is 300 AU and greater; Tier 2 is less than 300 AU.
EPA is co-proposing a two-tier and a three-tier structure (phosphorus--
Scenario \2/3\ and Phosphorus--Scenario 4a). Table 11-9 summarizes the
regulatory scenarios considered in the benefits analysis.
Table 11-9.--Regulatory Scenarios Considered in the Benefits Analysis
------------------------------------------------------------------------
Effluent
Regulatory scenario NPDES revisions guidelines
revisions
------------------------------------------------------------------------
Baseline...................... CAFOs include any AFO Manure
with over 1,000 AUs, application not
as well as AFOs with regulated.
300 or more AUs that
meet certain
requirements.
Nitrogen--Scenario 1.......... Baseline scenario plus Nitrogen-based
dry poultry and manure
immature swine and application.
heifer operations.
Nitrogen--Scenario 2/3........ New NPDES conditions Nitrogen-based
for identifying CAFOs manure
among AFOs with 300- application.
1000 AUs, plus dry
poultry and immature
swine and heifer
operations.
Nitrogen--Scenario 4a......... CAFOs include all AFOs Nitrogen-based
with 500 or more AUs, manure
plus dry poultry, application.
immature swine and
heifer manure
operations.
Nitrogen--Scenario 4b......... CAFOs include all AFOs Nitrogen-based
with 300 or more AUs, manure
plus dry poultry, application.
immature swine and
heifer operations.
Phosphorus Scenario 1......... Baseline scenario plus Phosphorus-based
dry poultry and manure
immature swine and application.
heifer operations.
Phosphorus Scenario 2/3*...... New NPDES conditions Phosphorus-based
for identifying CAFOs manure
among AFOs with 300- application.
1000 AUs, plus dry
poultry and immature
swine and heifer
operations.
Phosphorus Scenario 4a*....... CAFOs include all AFOs Phosphorus-based
with 500 or more AUs, manure
plus dry poultry, application.
immature swine and
heifer operations.
[[Page 3116]]
Phosphorus Scenario 4b........ CAFOs include all AFOs Phosphorus-based
with 300 or more AUs, manure
plus dry poultry, application.
immature swine and
heifer operations.
------------------------------------------------------------------------
* Proposed scenarios.
EPA has developed a model facility analysis to assess changes in
pollutant loadings under baseline conditions and proposed regulatory
scenarios. First, the analysis disaggregates the universe of AFOs
according to a suite of characteristics directly affecting manure
generation, manure management, and pollutant loadings. AFOs are then
grouped into five geographic regions. Within each geographic region,
EPA defines model facilities by production sector, subsector, and size
(number of animals).
EPA then calculates manure production and the associated production
of pollutants for each model facility. EPA multiplies the number of
animal units per model facility by the manure production per animal
unit to determine total manure production. EPA then calculates total
generation of nutrients based on the typical pollutant concentrations
per unit of recoverable manure for each animal type.
The core modeling analysis focuses on land application practices
for each model facility and the capacity for soil and crop removal of
nutrients applied to the land.\1\ EPA divides the total nitrogen and
phosphorus generated in manure by the average total acreage available
for land application for an operation in the given region, size class,
and production sector. The ratio of nutrients applied to crop nutrient
requirements provides a measure of the excess nutrients applied in the
manure. This in turn forms the foundation for loadings analyses of
regulatory scenarios that call for adherence to agronomic rates of
nutrient application.
---------------------------------------------------------------------------
\1\ In addition to modeling loadings based on manure
application, EPA develops two complementary analyses to examine
loadings from storage structures and feedlots.
---------------------------------------------------------------------------
EPA models ``edge-of-field'' loadings (i.e., pollutant loadings at
the boundary of the model facility) using the Groundwater Loading
Effects of Agricultural Management Systems (GLEAMS) model. This field-
scale model simulates hydrologic transport, erosion, and biochemical
processes such as chemical transformation and plant uptake. The model
uses information on soil characteristics and climate, along with
nutrient production data, to model losses of nutrients in surface
runoff, sediment, and groundwater leachate. Loadings are modeled for
the pre- and post-regulatory scenarios to estimate changes in loadings
attributable to the proposed standards.
Finally, EPA extrapolates from the model facilities to develop
national estimates of baseline and post-regulatory pollutant loadings
from AFOs. Using the USDA Census of Agriculture, EPA determines the
number of operations that raise animals under confinement. Then, EPA
determines the number of CAFOs based on operations that are defined as
CAFOs and smaller operations that are designated as CAFOs based on
site-specific conditions, as established by the permitting authority.
Finally, AFOs and CAFOs by region are placed into counties (and
eventually watersheds) using published county level Census data.
Therefore, the end product of the GLEAMS modeling is a spatial
distribution of aggregated edge-of-field loadings that can be used in
the water quality modeling and benefits monetization process described
below.
National Surface Water Pollution Study. The National Water
Pollution Control Assessment Model (NWPCAM) was employed to estimate
national economic benefits to surface water quality resulting from
implementation of various scenarios for regulating CAFOs. NWPCAM is a
national-scale water quality model for simulating the water quality and
economic benefits that can result from various water pollution control
policies. NWPCAM is designed to characterize water quality for the
Nation's network of rivers and streams, and, to a more limited extent,
its lakes. Using GLEAMS output data, NWPCAM is able to translate
spatially varying water quality changes resulting from different
pollution control policies into terms that reflect the value
individuals place on water quality improvements. In this way, NWPCAM is
capable of deriving economic benefit estimates for scenarios for
regulating CAFOs.
NWPCAM estimates pollutant loadings to the stream (nitrogen,
phosphorous, metals, pathogens and sediment) for each regulatory
scenario. These loadings by scenario (NWPCAM output) are used as input
to the other studies. Thus, all stream loading estimates are derived
from NWPCAM.
1. NWPCAM Loading reductions
Table 11-10 shows the estimated pollutant reduction for nitrogen,
phosphorus, fecal coliform, fecal streptococci, and sediment for each
of the five NPDES regulatory scenarios based on either nitrogen or
phosphorus manure land application. Nitrogen reductions range from 14
million to 33 million kgs per year; phosphorus ranges from 35 million
to 59 million kgs per year; fecal coliform from 26 billion to 38
billion colonies per year; fecal streptococci from 37 to 65 billion
colonies per year; and sediment from 0 kgs to 38 million kgs per year.
The proposed Phosphorus--Scenario 2/3 shows a reduction of 30 M kg
(66M lbs) of nitrogen, 54M kg (119M lbs) of phosphorus, 34 billion
colonies of fecal coliform, 60 billion colonies of fecal strep, and 35B
kg (77B lbs) of sediment. Phosphorus--Scenario 4a shows a reduction of
29 million kg (64M lbs)of nitrogen, 52 million kg (115 M lbs) of
phosphorus, 32 billion and 58 billion colonies of fecal coliform and
fecal streptococci, respectively and 34 billion kg (75B lbs) of
sediment to our nation's waters each year.
[[Page 3117]]
Table 11-10.--Pollutant Reduction Based on Nitrogen or Phosphorus Manure Application Rates by NPDES Scenario
----------------------------------------------------------------------------------------------------------------
Fecal Fecal Sediment
Nitrogen Phosphorus Coliform Strep (billion
(million (million (billion (billion (billion
kg) kg) colonies) colonies) kg)
----------------------------------------------------------------------------------------------------------------
Nitrogen--Scenario 1............................... 14 35 26 37 0
Nitrogen--Scenario 2/3............................. 16 45 31 45 0
Nitrogen--Scenario 4a.............................. 15 42 29 44 0
Nitrogen--Scenario 4b.............................. 18 48 34 47 0
Phosphorus--Scenario 1............................. 25 42 29 50 26
Phosphorus--Scenario 2/3*.......................... 30 54 34 60 35
Phosphorus-- Scenario 4a*.......................... 29 52 32 58 34
Phosphorus--Scenario 4b............................ 33 59 38 65 38
----------------------------------------------------------------------------------------------------------------
*proposed scenarios.
In addition, EPA estimated loadings reductions to surface waters
for various metals found in manure: zinc, copper, cadmium, nickel and
lead. The range of loadings reductions is shown in Table 11-11.
Table 11-11.--Range of Metal Loading Reductions Across Scenarios
------------------------------------------------------------------------
Metal low (kg) high (kg)
------------------------------------------------------------------------
Zinc........................... 10 M.............. 19 M
Copper......................... 546 K............ 1,051 K
Cadmium........................ 23 K.............. 39 K
Nickel......................... 219 K............. 418 K
Lead........................... 395 K............. 777 K
------------------------------------------------------------------------
Table 11-12 is a list of metals and load reductions per year for
the proposed scenarios.
Table 11-12.--Metal Loading Reductions for Scenario 2/3-Scenario 4a
------------------------------------------------------------------------
Metal Kilograms*
------------------------------------------------------------------------
Zinc.................................. 18 million/17 million.
Copper................................ 1 million/895 thousand.
Cadmium............................... 37 thousand/35 thousand.
Nickel................................ 400 thousand/345 thousand.
Lead.................................. 740/690 thousand.
------------------------------------------------------------------------
*rounded to the nearest 10.
The methods used to develop these loading reduction estimates are
outlined in detail in the Environmental and Economic Benefits of the
NPDES/ELG CAFO Rules.
2. Monetized Benefits
a. National Water Pollution Control Assessment Model (NWPCAM).
Economic benefits associated with the various AFO/CAFO scenarios are
based on changes in water quality use-support (i.e., boatable,
fishable, swimmable) and the population benefitting from the changes.
Benefits are calculated state-by-state at the State (local) scale as
well as at the national level. For each State, benefits at the local-
scale represent the value that the State population is willing to pay
for improvements to waters within the State or adjoining the State. For
each State, benefits at the national-scale represent the value that the
State population is willing to pay for improvements to waters in all
other states in the continental United States.
Based on the NWPCAM analysis, the total national willingness-to-pay
(WTP) benefits at the local-scale for all water quality use-supports
ranged from approximately $4.3 million (1999 dollars) for the least
stringent scenario to $122.1 million for the most stringent scenario.
The total national WTP benefits at the national-scale for all water
quality use-supports ranged from approximately $0.4 million (1999
dollars) for the least stringent scenario to $22.7 million for the most
stringent scenario. Total WTP benefits (i.e., sum of local-scale and
national-scale) for all water quality use-supports ranged from
approximately $4.9 million (1999 dollars) for the least stringent
scenario to $145 million for the most stringent scenario.
Table 11-13 summarizes the resulting estimates of economic benefits
for each of the six regulatory scenarios analyzed. EPA estimates that
the annual benefits of Phosphorus--Scenario 2/3 is approximately $127
million per year; for Phosphorus--Scenario 4a is $108 million per year.
Table 11-13.--Economic Benefit of Estimated Improvements in Surface
Water Quality
[In millions of 1999 dollars]
------------------------------------------------------------------------
Annual
Regulatory scenario benefits
------------------------------------------------------------------------
Nitrogen--Scenario 1....................................... $4.9
Nitrogen--Scenario 2/3..................................... 6.3
Nitrogen--Scenario 4a...................................... 5.5
[[Page 3118]]
Nitrogen--Scenario 4b...................................... 7.2
Phosphorus--Scenario 1..................................... 87.6
Phosphorus--Scenario 2/3*.................................. 127.1
Phosphorus--Scenario 4a*................................... 108.5
Phosphorus--Scenario 4b.................................... 145.0
------------------------------------------------------------------------
*Proposed scenarios.
b. Shellfish Beds. Pathogen contamination of coastal waters is a
leading cause of shellfish bed harvest restrictions and closures.
Sources of pathogens include runoff from agricultural land and
activities. Using The 1995 National Shellfish Register of Classified
Growing Waters (shellfish register) published by the National Oceanic
and Atmospheric Administration (NOAA), EPA estimated the possible
improvements to shellfish bed harvesting due to expected pathogen
reductions of each regulatory scenario.
First, EPA characterized the baseline annual shellfish bed
loadings. Then, EPA estimated the area of shellfish-growing waters for
which current loadings are harvested. For the third step, EPA
calculated the average annual per-acre yield of shellfish form
harvested waters. Next, EPA estimated the area of shellfish-growing
waters that are currently unharvested as a result of pollution from
AFOs. From this, EPA calculated the potential harvest of shellfish from
waters that are currently unharvested as a result of pollution from
AFOs. Estimates for all scenarios range from $1.8 million to $2.9
million. Phosphorus--Scenario3 is $2.7 million and Phosphorus--Scenario
4a is $2.4 million.
c. Fishkills. Episodic fish kill events resulting from spills,
manure runoff, and other discharges of manure from animal waste feeding
operations continue to remain a serious problem in the United States.
The impacts from these incidents range from immediate and dramatic kill
events to less dramatic but more widespread events. Manure dumped into
and along the West Branch of the Pecatonica River in Wisconsin resulted
in a complete kill of smallmouth bass, catfish, forage fish, and all
but the hardiest insects in a 13 mile stretch of the river. Less
immediate catastrophic impacts on water quality from manure runoff, but
equally important, are increased algae growth or algae blooms which
remove oxygen from the water and may result in the death of fish.
Manure runoff into a shallow lake in Arkansas resulted in a heavy algae
bloom which depleted the lake of oxygen, killing many fish.
Fish health and fish kills are an indication of water quality. If
fish cannot survive or are sick in their natural habitat then the
public may view the water as unsuitable for recreational activities and
fish unfit for human consumption. Parts of the Eastern Shore of the
United States have been plagued with problems related to pfiesteria, a
dinoflagellate algae that exist in rivers at all times, but can
transform itself into a toxin that eats fish. Fish attacked by
pfiesteria have lesions or large, gaping holes on them as their skin
tissue is broken down; the lesions often result in death. The
transformation of pfiesteria to the toxic form is believed to be the
result of high levels of nutrients. Fish kills related to pfiesteria in
the Neuse River in North Carolina have been blamed on the booming hog
industry and the associated waste spills and runoff from the hog farms.
There is preliminary evidence that suggests that there are human
health problems associated with exposure to pfiesteria. As a result,
people most likely would limit or avoid recreational activities in
waters with pfiesteria-related fish kills. The town of New Bern, a
popular summer vacation spot along the Neuse River in North Carolina,
was concerned about a decline in tourism after several major fish kills
in the summer of 1995. Not only were fish killed, people became sick
after swimming or fishing in the waters. People swimming in the waters
reported welts and sores on their body. Summer camps canceled boating
classes and children were urged to stay out of the water. Fishing boats
were concerned about taking people fishing on the river. People were
warned not to eat fish that were diseased or sick. At one point, after
seeing miles and miles of dead fish, a top environmental official
issued a warning urging people not to swim, fish, or boat in the fish-
kill zone. Many blame the heavy rainfall which pumped pollutants from
overflowing sewage plants and hog lagoons into the river, creating
algae blooms, low oxygen and pfeisteria outbreaks as the cause of the
fish kills.
Reports on fish kill events in the United States were collected by
the Natural Resources Defense Council and the Izaak Walton League.
Nineteen states reported information on historical and current fish
kills. Using these data, EPA estimated the benefits related to reduced
fish being killed for each regulatory scenario. At a seven percent
discount rate, benefits range from $2 million to $42 million. Benefots
for Phosphorus--Scenario 3 range from $2.4 million to $30.6 million;
for Phosphorus--Scenario 4a, from $2.8 million to $34.5 million.
d. Groundwater Contamination. CAFOs can contaminate groundwater and
thereby cause health risks and welfare losses to people relying on
groundwater sources for their potable supplies or other uses. Of
particular concern are nitrogen and other animal waste-related
contaminants (originating from manure and liquid wastes) that leach
through the soils and the unsaturated zone and ultimately reach
groundwaters. Nitrogen loadings convert to elevated nitrate
concentrations at household and community system wells, and elevated
nitrate levels in turn pose a risk to human health in households with
private wells (nitrate levels in community wells are regulated to
protect human health). The proposed regulation will generate benefits
by reducing nitrate levels in household wells, and there is clear
empirical evidence that households have a positive willingness to pay
to reduce nitrate concentrations in their water supplies.
The federal health-based National Primary Drinking Water Standard
for nitrate is 10 mg/L, and this Maximum Contaminant Level (MCL)
applies to all Community Water Supply systems. Households relying on
private wells are not subject to the federal MCL for nitrate but levels
above 10 mg/L are considered unsafe for sensitive subpopulations (e.g.,
infants). Several economic studies indicate a considerable WTP by
households to reduce the likelihood of nitrate levels exceeding 10 mg/L
(e.g., $448 per year per household (Poe and Bishop, 1991)). There also
is evidence of a positive household WTP to reduce nitrate levels even
when baseline concentrations are considerably below the MCL
(approximately $2 per mg/L of reduced nitrate concentration
(Crutchfield et al., 1997, De Zoysa, 1995)).
Based on extensive U.S. Geologic Survey (USGS) data on nitrate
levels in wells throughout the country, an empirical model was
developed to predict how each regulatory option would affect the
distribution of nitrate concentrations in household wells. Table 11-14
indicates the number of household wells that are estimated to have
baseline (i.e., without regulation) concentrations above 10 mg/L and
that will have these concentration reduced to levels below the MCL for
each option.
[[Page 3119]]
Also shown are the households with predicted nitrate levels that are
below the MCL at baseline, but that will experience further reductions
in nitrate levels due to the proposed regulation.
Table 11-14.--Reduction in Households Exceeding MCL and mg/L of Nitrate
in Wells
------------------------------------------------------------------------
Reduction, from
baseline, in # Total number of
Regulatory Scenario households mg/L reduced in
exceeding 10 mg/ wells at 1-10 mg/
L L baseline
------------------------------------------------------------------------
Baseline # of households affected... 1,277,137 6,195,332
Nitrogen--Scenario 1................ 152,204 961,741
Nitrogen--Scenario 2/3.............. 152,204 1,007,611
Nitrogen--Scenario 4a............... 161,384 1,186,423
Nitrogen--Scenario 4b............... 161,384 1,186,423
Phos.--Scenario 1................... 161,384 1,103,166
Phos--Scenario 2/3*................. 161,384 1,159,907
Phos--Scenario 4a*.................. 165.974 1,374,990
Phos--Scenario 4b................... 165,974 1,374,990
------------------------------------------------------------------------
* Proposed scenarios.
The monetized benefits of these nitrate concentration reductions is
estimated to be $49.4 million per year for Phosphorus--Scenario 2/3, as
shown in Table 11-15. The total benefits of this scenario consist of
$47.8 million for the households that have nitrate levels reduced to
below the MCL from baseline concentrations above 10 mg/L, plus an
additional $1.5 million for those households with nitrate reductions
relative to baseline levels below the MCL. The monetized benefits of
these nitrate concentration reductions is estimated to be $51.0 million
per year for Phosphorus--Scenario 4a. The total benefits of this option
consist of $49.2 million for the households that have nitrate levels
reduced to below the MCL from baseline concentrations above 10 mg/L,
plus an additional $1.7 million for those households with nitrate
reductions relative to baseline levels below the MCL. The household
benefits of the other options are also shown in the table, and range
from $46.4-$50.1 million per year.
Table 11-15.-- Annualized Monetary Benefits Attributable To Reduced Nitrate Concentrations
----------------------------------------------------------------------------------------------------------------
Benefits from Benefits from
households households
Regulatory scenario Total benefits exceeding MCL at between 1 and 10
baseline mg/L at baseline
----------------------------------------------------------------------------------------------------------------
Nitrogen--Scenario 1...................................... $46,372,457 $45,118,803 $1,219,763
Nitrogen--Scenario 2/3.................................... 46,432,250 45,118,803 1,276,293
Nitrogen--Scenario 4a..................................... 49,386,622 47,840,089 1,498,104
Nitrogen--Scenario 4b..................................... 49,386,622 47,840,089 1,498,104
Phosphorus--Scenario 1.................................... 49,278,094 47,840,089 1,396,043
Phosphorus--Scenario 2/3*................................. 49,352,058 47,840,089 1,465,648
Phosphorus--Scenario 4a*.................................. 50,993,067 49,200,732 1,729,337
Phosphorus--Scenario 4b................................... 50,993,067 49,200,732 1,729,337
----------------------------------------------------------------------------------------------------------------
* Proposed scenarios.
e. Total Benefit of Proposed Regulatory Scenario. Table 11-16 shows
the annualized benefits for each of the studies conducted. Table 11-17
shows the summary of annualized benefits for three discount rates (3,
5, and 7 percent). The total monetized benefits for this proposed rule
are, at a minimum, $163 million for Phosphorus--Scenario 2/3 and $146
million for Phosphorus--Scenario 4a, discounted at seven percent. At a
three percent discount rate, the annualized benefits for Phosphorus--
Scenario 3 are $180 million and for Phosphorus--Scenario 4a, $163
million. These represent the lower bound estimates for this analysis.
The upper end of the range would include estimates for drinking water
treatment plant cost savings, surface water improvements from
nonboatable to boatable water quality conditions, and other benefits
that we were unable to estimate at this time. We plan to include some
of these monetized benefits in the final rule.
Table 11-16.--Estimated Annualized Benefits of Revised CAFO Regulations
[1999 dollars, millions]
----------------------------------------------------------------------------------------------------------------
Recreational Reduced
Regulatory Scenario and non-use Reduced Improved private well
benefits fish kills shellfishing contamination
----------------------------------------------------------------------------------------------------------------
Nitrogen--Scenario 1................................. 4.9 0.1-0.2 0.1-1.8 33.3-49.0
Nitrogen--Scenario 2/3............................... 6.3 0.1-0.3 0.2-2.4 33.3-49.1
Nitrogen--Scenario 4a................................ 5.5 0.1-0.3 0.2-2.2 35.5-52.2
Nitrogen--Scenario 4b................................ 7.2 0.1-0.3 0.2-2.6 35.5-52.2
[[Page 3120]]
Phosphorus--Scebarui 1............................... 87.6 0.2-0.3 0.2-2.1 35.4-52.1
Phosphorus--Scenario 2/3*............................ 127.1 0.2-0.4 0.2-2.7 35.4-52.1
Phosphorus--Scenario 4a*............................. 108.5 0.2-0.4 0.2-2.4 36.6-53.9
Phosphorus--Scenario 4b.............................. 145.0 0.2-0.4 0.2-3.0 36.6-53.9
----------------------------------------------------------------------------------------------------------------
* Proposed scenarios.
Table 11-17.--Summary of Annualized Benefits
[1999 dollars, millions]
----------------------------------------------------------------------------------------------------------------
Discount rates
-----------------------------------------------
Regulatory scenario 3 percent 5 percent 7 percent
-----------------------------------------------
Low High Low High Low High
----------------------------------------------------------------------------------------------------------------
Nitrogen--Scenario 1............................................ 54.1 55.9 45.0 46.9 38.4 40.2
Nitrogen--Scenario 2/3.......................................... 55.7 58.0 46.6 48.9 39.9 42.3
Nitrogen--Scenario 4a........................................... 58.0 60.2 48.3 50.5 41.2 43.4
Nitrogen--Scenario 4b........................................... 59.7 62.3 50.1 52.6 43.0 45.5
Phosphorus--Scenario 1.......................................... 140.0 142.1 130.4 132.4 123.3 125.4
Phosphorus--Scenario 2/3*....................................... 179.7 182.3 170.0 172.7 163.0 165.6
Phosphorus--Scenario 4a*........................................ 162.8 165.1 152.8 155.2 145.5 147.9
Phosphorus--Scenario 4b......................................... 199.4 202.2 189.4 192.2 182.1 185.0
----------------------------------------------------------------------------------------------------------------
* Proposed scenarios.
XII. Public Outreach
A. Introduction and Overview
EPA has actively involved interested parties to assist it in
developing a protective, practical, cost-effective regulatory proposal.
EPA has provided many opportunities for input in this rulemaking
process. EPA has met with various members of the stakeholder community
on a continuing basis through meeting requests and invitations to
attend meetings, conferences, and site visits. These meetings with
environmental organizations, agricultural organizations, producer
groups, and producers representing various agricultural sectors have
allowed EPA to interact with and receive input from stakeholders about
the Unified Strategy and the NPDES and effluent limitations regulatory
revisions. In addition, EPA convened a Small Business Advocacy Review
Panel to address small entity concerns. EPA also sent an outreach
package to and met with several national organizations representing
State and local governments. More detailed information on EPA's public
outreach is provided in the rulemaking record.
B. Joint USDA/EPA Unified AFO Strategy Listening Sessions
In the fall of 1998, EPA and USDA announced eleven public outreach
meetings designed to allow public comment on the Draft Unified National
AFO Strategy. The meetings were held in the following cities: Tulsa,
Oklahoma; Harrisburg, Pennsylvania; Ontario, California; Madison,
Wisconsin; Seattle, Washington; Des Moines, Iowa; Chattanooga,
Tennessee; Indianapolis, Indiana; Fort Worth, Texas; Denver, Colorado;
and Annapolis, Maryland. Each meeting included a pre-meeting among
state and regional officials, EPA, and USDA representatives to discuss
the draft strategy and the issues posed by CAFOs in general. All
participants in the public sessions, including numerous small entities,
were given the opportunity to sign up and provide their comments to a
panel consisting of EPA, USDA, and local representatives. Many of the
commenters made points or raised issues germane to small entities. A
transcript of these comments was used by EPA and USDA in developing the
final Unified National AFO Strategy. These comments and concerns have
been considered by EPA in the development of the revised NPDES CAFO
regulations. The transcripts of these meetings are available on the OWM
Web Site (www.epa.gov/owm/afo.htm) and are available in the record.
C. Advisory Committee Meeting
EPA was invited to meet with the Local Government Advisory
Committee, Small Community Advisory Subcommittee on September 8, 1999.
At this Federal Advisory Committee Act meeting, EPA described the CAFO
regulatory revisions being considered, and responded to questions
concerning the effect of EPA's regulatory actions on small communities.
While the CAFO regulations do not directly affect small communities,
AFOs do have an effect on local economies and on the local environment.
Thus, how they are regulated (or not regulated) has implications for
local governments. EPA is keeping local government concerns in mind as
it proceeds with the CAFO regulatory revisions and general public
outreach activities.
D. Farm Site Visits
EPA conducted approximately 110 site visits to collect information
about waste management practices at livestock and poultry operations.
Agency staff visited a wide range of operations, including those
demonstrating centralized treatment or new and innovative technologies.
EPA staff visited livestock and poultry operations throughout the
United States, the majority of which were chosen with the assistance of
the leading industry trade associations and also by the Natural
Resources Defense Council, the Clean Water Network, university experts,
State cooperative and extension agencies, and state and EPA regional
representatives.
[[Page 3121]]
EPA also attended USDA-sponsored farm tours, as well as tours offered
at industry, academic, and government conferences. Details on these
visits are provided in the rulemaking record.
EPA staff visited cattle feeding operations in Texas, Oklahoma,
Kansas, Colorado, California, Indiana, Nebraska, and Iowa, as well as
veal operations in Indiana. The capacities of the beef feedlots varied
from 500 to 120,000 head. EPA also visited dairies in Pennsylvania,
Florida, California, Colorado, and Wisconsin, with the total mature
dairy cattle at the operations ranging from 40 to 4,000 cows. In
addition, EPA visited broiler, layer and turkey facilities in Georgia,
Arkansas, North Carolina, Virginia, West Virginia, Maryland, Delaware,
Pennsylvania, Ohio, Indiana, and Wisconsin. EPA visited hog facilities
in North Carolina, Ohio, Iowa, Minnesota, Texas, Colorado, Oklahoma,
and Utah.
E. Industry Trade Associations
Throughout regulatory development, EPA has worked with
representatives from the national trade groups, including: National
Cattlemen's Beef Association (NCBA); American Veal Association (AVA);
National Milk Producers Federation (NMPF); Professional Dairy Heifers
Growers Association (PDHGA); Western United Dairymen (WUD); National
Pork Producers Council (NPPC); United Egg Producers and United Egg
Association (UEP/UEA); National Turkey Federation (NTF); and the
National Chicken Council (NCC). All of the above organizations have
provided assistance by helping with site visit selection, submitting
supplemental data, reviewing descriptions of the industry and waste
management practices, and participating in and hosting industry
meetings with EPA.
F. CAFO Regulation Workgroup
EPA established a workgroup that included representatives from USDA
and seven states, as well as EPA Regions and headquarters offices. The
workgroup considered input from stakeholders and developed the
regulatory options presented in today's proposal.
G. Small Business Advocacy Review Panel
1. Summary of Panel Activities
To address small business concerns, EPA's Small Business Advocacy
Chairperson convened a Small Business Advocacy Review (SBAR) Panel
under section 609(b) of the Regulatory Flexibility Act (RFA) as amended
by the Small Business Regulatory Enforcement Fairness Act (SBREFA).
Participants included representatives of EPA, the Small Business
Administration (SBA) and the Office of Management and Budget (OMB).
``Small Entity Representatives'' (SERs), who advised the Panel,
included small livestock and poultry producers as well as
representatives of the major commodity and agricultural trade
associations. Information on the Panel's proceedings and
recommendations is in the Final Report of the Small Business Advocacy
Review Panel on EPA's Planned Proposed Rule on National Pollutant
Discharge Elimination System (NPDES) and Effluent Limitations Guideline
(Effluent Guidelines) Regulations for Concentrated Animal Feeding
Operations (hereinafter called the ``Panel Report''), along with other
supporting documentation included as part of the Panel process. This
information can be found in the rulemaking record.
Prior to convening a SBAR Panel, EPA distributed background
information and materials to potential SERs on September 3, 1999 and
September 9, 1999. On September 17, 1999, EPA held a conference call
from Washington, D.C. which served as a pre-panel forum for small
business representatives to provide input on key issues relating to the
proposed regulatory changes to the ``CAFO Rule.'' Twenty-seven small
business representatives from the beef, dairy, swine, poultry, and
exotic animal livestock industries participated in the conference call.
A summary of the conference call is included in the Panel Report.
Following the conference call, 19 of the 41 small business advisors and
national organizations invited to participate on the conference call
submitted written comments. These written comments are included in the
Panel Report.
The SBAR Panel for the ``CAFO Rule'' was formally convened on
December 16, 1999. On December 28, 1999, the Panel distributed an
outreach package to the final group of SERs, which included many of the
participants in EPA's September 17, 1999 outreach conference call. The
package included: a SER outreach document, which provided a definition
of a small business and described those entities most likely to be
affected by the rule; an executive summary of EPA's cost methodology;
regulatory flexibility alternatives; a cost methodology overview for
the swine, poultry, beef, and dairy sectors; a cost annualization
approach; and a list of questions for SERs. Additional modeling
information was also sent to SERs on January 7, 2000 and January 10,
2000. A complete list of these documents can be found in the Panel
Report; all information sent to the SERs is included in the record.
The SERs were asked to review the information package and provide
verbal comments to the Panel during a January 5, 2000 conference call,
in which 22 SERs participated. During this conference call, SERs were
also encouraged to submit written comments. SERs were given an
additional opportunity to make verbal comments during a second
conference call held on January 11, 2000, in which 20 SERs
participated. During both conference calls, SERs were asked to comment
on the costs and viability of the proposed alternatives under
consideration by EPA. A summary of both conference calls can be found
in the Panel Report. Following the calls, the Panel received 20 sets of
written comments from 14 SERs. A complete set of these comments is
included in the Panel Report.
2. Summary of Panel Recommendations
A full discussion of the comments received from SERs and Panel
recommendations is included in the Panel Report. The major issues
summarized are as follows.
a. Number of Small Entities. The Panel reviewed EPA's methodology
to develop its estimate of the small entities to which the proposed
rule will likely apply. EPA proposed two alternative approaches to
estimate the number of small businesses in these sectors. Both
approaches identify small businesses in these sectors by equating SBA's
annual revenue definition with the number of animals at an operation
and estimate the total number of small businesses in these sectors
using farm size distribution data from USDA. One approach equates SBA's
annual revenue definition with operation size using farm revenue data,
as described in Section X.J.2 of this document. Another approach
equates SBA's annual revenue definition with the operation size using a
modeling approach developed by EPA that calculates the amount of
livestock revenue at an operation based market data, including the
USDA-reported price received by producers, average yield, and the
number of annual marketing cycles. (Additional information on this
latter approach is in the rulemaking record.)
During the Panel process, and following formal consultation with
SBA, the Panel participants agreed to use the first approach to
estimate the number of small businesses in these sectors. More details
on this approach is provided in Section X.J.2 and in Section 9 of the
[[Page 3122]]
Economic Analysis. More detail on the Panel's deliberation of the
approach used to determine the number of small businesses is provided
Sections 4 and 5 of the Panel Report and in other support documentation
developed during the SBAR Panel process. The Panel noted that the
revised methodology may not accurately portray actual small businesses
in all cases across all sectors. The Panel also recognized that, under
this small business definition, EPA would be regulating some small
facilities, but urged EPA to consider the small business impacts of
doing so.
b. Potential Reporting, Record Keeping, and Compliance
Requirements. Record Keeping Related to Off-Site Transfer of Manure.
The Panel reviewed EPA's consideration of record keeping and reporting
requirements in connection with off-site transfer of manure. The Panel
recommended that EPA review and streamline the requirements for small
entities. In response to this recommendation, EPA is limiting its
proposal to keep records of the name and address of the entity to which
the CAFO is transferring manure, how much is being transferred and the
nutrient content of the manure on-site. This information would allow
EPA to track manure, and to follow-up with the third party recipient to
ascertain whether the manure was applied in accordance with Clean Water
Act requirements that may apply. EPA is also proposing under one co-
proposed option that a CAFO obtain a certification from recipients that
land application is done in accordance with proper agricultural
practices. EPA assumes recipients of manure are mostly field crop
producers who already maintain appropriate records relating to nutrient
management. EPA is not proposing to establish specific requirements for
these offsite recipients.
Permit Application and Certification Requirements. The Panel asked
EPA to consider the burden associated with increasing the number of
entities subject to permit between 300 AU and 1,000 AU. Furthermore,
the Panel recommended that EPA carefully consider appropriate
streamlining options before considering a more burdensome approach. EPA
considered several alternative scenarios for the scope of permit
coverage of facilities in this size group, and decided to
simultaneously co-propose two scenarios, as each offers different means
of accomplishing similar environmental outcomes.
The first alternative proposal would retain the current three-tier
structure, but would require an operation in the 300-1,000 AU size tier
to certify to the permitting authority that it does not meet any of the
``risk-based'' conditions (described in Section VII), and thus is not
required to obtain a permit. The three-tier structure would require all
AFOs with 300 AU or more to, at a minimum, obtain a permit nutrient
plan and submit a certification to the permit authority. This
alternative would provide the permit authority the opportunity to
implement effective programs to assist AFOs in order to minimize how
many would be required to apply for a permit. Because those certifying
would not be CAFOs, however, they would have access to section 319
nonpoint source funds. This co-proposed alternative does not meet one
of the goals of today's proposal, as recommended by the Panel, that is,
to simplify the regulations to improve understanding and therefore
compliance by the regulated community. Further, the conditions are such
that all facilities with 300 AU or more would incur some cost
associated with certifying they do not meet any of the conditions. EPA
is also requesting comment on a variation of the three-tier structure
that was presented to the SERs and generally favorably received by the
Panel (see detailed discussion in Section VII.B.3).
The second alternative proposal would adopt a two-tier structure
that defines all operations with 500 AU or more as CAFOs. (EPA is also
requesting comment on a 750 AU threshold.) This proposal would provide
regulatory relief for operations between 300 AU and 500 AU that may be
considered CAFOs under the existing regulations. Operations in this
size group would not be subject to the certification process and would
not incur the costs associated with certification, such as the costs to
obtain a certified Permit Nutrient Plan and to submit a certification
to the permit authority. Under the two-tier structure, operations with
more than 500 AU would all be required to apply for a permit. All
facilities with fewer than 500 AU would be subject to permitting as
CAFOs only through case-by-case designation based on a finding that the
operation is a significant contributor of pollution by the permit
authority. This proposal offers simplicity and clarity as to which
entities will be subject to the proposed regulations and those that
will not, which was recommended by the Panel, as well as indicated by
the regulated community as one of the goals of today's proposal.
Representatives of some State programs, however, have indicated that
they would prefer an option that allows State non-NPDES programs to
address issues at CAFOs in their states, rather than being required to
write permits.
EPA is also proposing to provide regulatory relief to small
businesses by eliminating the mixed animal calculation. As a result,
smaller operations that house a mixture of animal types where none of
these animal types independently meets the regulatory threshold are not
considered CAFOs under either of today's proposals, unless they are
individually designated. EPA believes that this will provide maximum
flexibility for these operations since most are now participating in
USDA's voluntary CNMP program, as outlined in the AFO Strategy. For
more information, see discussion in Section VII. A summary of EPA's
economic analysis is provided in Section X.J of this preamble.
Frequency of Testing. The Panel reviewed EPA's consideration of
requiring periodic soil testing. The Panel agreed that testing manure
and soil at different rates may be appropriate, but expressed concern
about the burden of any inflexible testing requirements on small
businesses. The Panel recommended that EPA consider leaving the
frequency of required testing to the discretion of local permit
writers, and request comment on any testing requirements that are
included in the proposed rule. The Panel further recommended that EPA
weigh the burden of testing requirements to the need for such
information.
EPA is proposing to require soil testing of each field every three
years and manure testing once per year. The proposed frequency is
consistent with standards in many states and also recommendations from
agricultural extension services. To ensure that soils have not reached
a critical concentration of phosphorus, EPA believes that it is
necessary to establish a minimum sampling frequency and testing
requirements for all CAFOs, regardless of size. Since it is believed
that much of the water pollution from agriculture comes from field
runoff, information on manure and soil content is essential for the
operator to determine at what rate manure should be applied. EPA
believes this information is essential for the permitting authority to
know whether the manure is being land applied at proper rates. The
local permit writer retains the discretion to require more frequent
testing.
Groundwater Requirements Where Linked to Surface Water. The Panel
reviewed EPA's consideration of an option that would require
groundwater controls at facilities that are determined to have a direct
hydrological connection
[[Page 3123]]
to surface water since there is reasonable potential for discharges to
surface water via ground water at these facilities (``Option 3'').
Because of the potentially high costs to small operators associated
with both making a determination of a hydrologic link and installing
controls (such as lagoon liners, mortality composting devices,
groundwater monitoring wells, concrete pads, and other technologies),
the Panel recommended that EPA examine this requirement, giving careful
consideration to the associated small entity impacts, in light of the
expected environmental benefits resulting from this option. The Panel
further recommended that if EPA decides to propose any such
requirements that it consider streamlining the requirements for small
entities (e.g., sampling at reduced rates) or exempting them
altogether.
(i) Existing CAFOs. EPA is proposing to require existing beef and
dairy CAFOs to install groundwater controls when the groundwater
beneath the production area has a direct hydrologic connection to
surface water (Option 3, as described in Section VIII). This includes
installation of wells and biannual sampling to monitor for any
potential discharge from the production area. CAFOs are also expected
to construct concrete pads or impermeable surfaces, as well as install
synthetic liners if necessary to prevent discharges to surface water
via direct hydrologic connection. The groundwater controls which are
part of the proposed BAT requirements are in addition to the land
application requirements which ensure that the manure and wastewater
application to land owned or controlled by the CAFO is done in
accordance with a PNP and does not exceed the nutrient requirements of
the soil and crop. EPA has determined that this option represents the
best available technology for existing beef and dairy CAFOs and that
this requirement is economically achievable under both proposed
permitting scenarios (i.e. the two-tier and three-tier structures),
although some CAFOs in these sectors may experience increased financial
burden. Because the risks from discharged pollutants from groundwater
to surface water are location-specific, EPA believes that the proposed
groundwater requirements are necessary at CAFOs where there is a
hydrologic connection to surface waters. EPA's is proposing that these
requirements are economically achievable by operations that are defined
as CAFOs and are also small businesses. The results of EPA's small
business analysis is provided in Section X.J of this preamble.
Moreover, EPA believes that the estimated benefits in terms of
additional groundwater-surface water protections would be significant.
EPA's pollution reduction estimates across options are presented in the
Development Document.
EPA is not proposing BAT requirements for the existing swine, veal
and poultry subcategories on the basis of Option 3, i.e., EPA rejected
proposing groundwater monitoring and controls in the effluent
guidelines for these CAFOs. As described in Section VIII of this
preamble, EPA is proposing Option 5 as the best available technology
economically achievable, which requires zero discharge from the animal
production area with no exception for storm events. Were EPA to add the
requirement to control discharges to groundwater that is directly
connected to surface waters in addition to the Option 5 requirements,
the costs would result in much greater financial impacts to hog and
poultry operations. EPA's analysis shows that the full cost of
groundwater controls (``Option 3'') in addition to requirements under
Option 5 would not be economically achievable by operations in these
sectors.
(ii) New CAFOs. EPA is proposing to require that all new CAFOs in
all subcategories install groundwater controls. EPA expects that
requiring groundwater monitoring is affordable to new facilities since
these facilities do not face the cost of retrofit. EPA's economic
analysis of new facility costs is provided in Section X.F.1(b) of this
preamble. More detailed information is provided in the Economic
Analysis and the Development Document.
c. Relevance of Other Federal Rules. The Panel did not note any
other Federal rules that may duplicate, overlap, or conflict with the
proposed rule.
d. Regulatory Alternatives. The Panel considered a wide range of
options and regulatory alternatives for reducing the burden on small
business in complying with today's proposal. These included:
Revised Applicability Thresholds. The Panel recommended that EPA
give serious consideration to the issues discussed by the Panel when
determining whether to establish less stringent effluent limitations
guidelines for smaller facilities, and whether to preserve maximum
flexibility for the best professional judgement of local permit
writers. The Panel also recommended that the Agency carefully evaluate
the potential benefits of any expanded requirements for operations with
between 300 and 1,000 AU and ensure that those benefits are sufficient
to warrant the additional costs and administrative burden that would
result for small entities.
EPA is proposing to apply the effluent limitation guidelines to all
facilities that are defined as CAFOs, although EPA is also requesting
comment on an option under which they would only apply to facilities
with greater than 1,000 AUs. Thus, under the three-tier structure all
CAFOs with 300 AU or more would be subject to the effluent guidelines.
Under the two-tier structure, all CAFOs with 500 AU or more would be
subject to the effluent guidelines. EPA is also requesting comment on a
750 AU threshold for the two-tier structure. Under both of the co-
proposed alternatives, EPA is proposing to eliminate the ``mixed''
animal calculation for operations with more than a single animal type
for determining which AFOs are CAFOs. As a result, smaller operations
that house a mixture of animal types where none of these animal types
independently meets the regulatory threshold are not considered CAFOs
under today's proposed rulemaking, unless they are individually
designated. EPA believes that this will provide maximum flexibility for
these operations since most are now participating in USDA's voluntary
CNMP program, as outlined in the AFO Strategy. For more information,
see discussion in Section VII.
EPA's two-tier proposal provides additional relief to small
businesses. Under the two-tier structure, EPA is proposing to establish
a regulatory threshold that would define as CAFOs all operations with
more than 500 AU. This co-proposed alternative would provide relief to
small businesses since this would remove from the CAFO definition
operations with between 300 AU to 500 AU that under the current rules
are defined as CAFOs. These operations would no longer be defined as
CAFOs and may avoid being designated as CAFOs if they take appropriate
steps to prevent discharges. In addition, if operations of any size
that would otherwise be defined as CAFOs can demonstrate that they have
no potential to discharge, they would not need to obtain a permit.
Also, under the two-tier structure, EPA is proposing to raise the size
standard for defining egg laying operations as CAFOs from 30,000 to
50,000 laying hens. This alternative would remove from the CAFO
definition egg operations of this size that under the current rules are
defined as CAFOs, if they utilize a liquid manure management system.
EPA believes that revising the regulatory thresholds below 1,000 AU
is necessary to protect the environment
[[Page 3124]]
from CAFO discharges. At the current 1,000 AU threshold, less than 50
percent of all manure and wastewater generated annually would be
captured under the regulation. Under the co-proposed alternatives,
between 64 percent (two-tier) and 72 percent (three-tier) would be
covered. (See Section IV.A of this preamble.) Total pre-tax compliance
costs to CAFOs with fewer than 1,000 AU is estimated to range between
$226 million annually (two-tier) to $298 million annually (three-tier),
or about one-third of the total estimated annual costs (see Section
X.E.1). EPA believes that the estimated benefits in terms of additional
manure coverage justify the estimated costs. EPA estimates that 60
percent (two-tier) to 70 percent (three-tier) of all operations that
are defined as CAFOs and are also small businesses are operations with
less than 1,000 AU. EPA's economic analysis, however, indicates that
these small businesses will not be adversely impacted by the proposed
requirements. EPA's estimates of the number of small businesses and the
results of its economic analysis is provided in Section X.J of this
preamble.
Under each co-proposed alternative, EPA is proposing that
operations that are not defined as CAFO (i.e., operations with fewer
animals than the AU threshold proposed) could still be designated as
CAFOs on a case-by-case basis. During the Panel process, the Panel
urged EPA not to consider changing the designation criteria for
operations with less than 300 AU. This includes the criterion that the
permitting authority must conduct an on-site inspection of any AFO, in
making a designation determination. EPA is not proposing to eliminate
the on-site inspection requirement. EPA believes it is appropriate to
retain the requirement for an on-site inspection before the permitting
authority determines that an operation is a ``significant contributor
of pollution.'' No inspection would be required to designate a facility
that was previously defined or designated as a CAFO. EPA is, however,
requesting comment on whether or not to eliminate this provision or to
redefine the term ``on-site'' to include other forms of site-specific
data gathering. In addition, EPA is proposing to delete two criteria,
including discharge from manmade device and direct contact with waters
of the U.S., as unnecessary to the determination of whether an
operation should be designated as a CAFO. EPA is also proposing to
clarify EPA's designation authority in States with NPDES approved
programs. For more information, see Section VII.
25-year, 24-hour Storm Event. At the time of SBREFA outreach, EPA
indicated to SERs and to the Panel that it was considering removing the
exemption, but not changing the design requirement for permitted CAFOs.
The Panel expressed concern about removing this exemption for
operations with fewer than 1000 AU. The Panel recommended that if EPA
removes the exemption, it should fully analyze the incremental costs
associated with permit applications for those facilities that are not
presently permitted that can demonstrate they do not discharge in less
than a 25-year, 24-hour storm event, as well as any costs associated
with additional conditions related to land application, nutrient
management, or adoption of BMPs that the permit might contain. The
Panel recommended that EPA carefully weigh the costs and benefits of
removing the exemption for small entities. The Panel also urged EPA to
consider reduced application requirements for small operations affected
by the removal of the exemption.
EPA is proposing to require that all operations that are CAFOs
apply for a permit. EPA is proposing to remove the 25-year, 24-hour
storm exemption from the definition of a CAFO. It is difficult to
monitor, and removal of this exemption will make the rule simpler and
more equitable. However, we are proposing to retain the 25-year, 24-
hour storm event as a design standard in the effluent limitation
guidelines for certain animal sectors (specifically, the beef and dairy
cattle sectors). As a result, operations in these sectors that
discharge only in the event of a 25-year, 24-hour storm would not be
exempt from being defined as CAFOs, but would be in compliance with
their permit as long as they met the 25-year, 24-hour storm design
standard. EPA is proposing to establish BAT for the swine, poultry, and
veal subcategories on the basis of Option 5 which bans discharge from
the production area under any circumstances. The technology basis for
this option is covered lagoons, and does not establish a different
design standard for these lagoons. Removal of the exemption from the
CAFO definition should have no impact on operations that are already
employing good management practices. More information is provided in
Sections VII and VIII of this document. Prior to proposing to remove
this exemption, EPA evaluated the incremental costs associated with
permit applications for those facilities that are not presently
permitted and other associated costs to regulated small entities. EPA's
economic analysis is provided in Section X.J of this preamble.
Estimated costs to the NPDES Permitting Authority are presented in
Section X.G.1. Section X.I presents a comparison of the annualized
compliance costs and the estimated monetized benefits.
Manure and Wastewater Storage Capacity. The Panel noted the SERs'
concern about the high cost of additional storage capacity and
recommended that EPA consider low-cost alternatives in its assessment
of best available technologies economically achievable, especially for
any subcategories that may include small businesses. The Panel was
concerned about the high cost of poultry storage and asked EPA to
consider low cost storage. EPA is proposing that facilities may not
discharge pollutants to surface waters. To meet this requirement,
facilities may choose to construct storage sheds, cover manure, collect
all runoff, or any other equally effective combination of technologies
and practices. The proposal does not directly impose any minimum
storage requirements.
Land Application. The Panel recommended that EPA continue to work
with USDA to explore ways to limit permitting requirements to the
minimum necessary to deal with threats to water quality from over-
application and to define what is ``appropriate'' land application,
consistent with the agricultural stormwater exemption. The Panel
recommended that EPA consider factors such as annual rainfall, local
topography, and distance to the nearest stream when developing any
certification and/or permitting requirements related to land
application. The Panel also noted the high cost of P-based application
relative to N-based application, and supported EPA's intent to require
the use of P-based application rates only where necessary to protect
water quality, if at all, keeping in mind its legal obligations under
the CWA. The Panel recommended that EPA consider leaving the
determination of whether to require the use of P-based rates to the
permit writer's discretion, and continue to work with USDA in exploring
such an option.
EPA recognizes that the rate of application of the manure and
wastewater is a site-specific determination that accounts for the soil
conditions at a CAFO. Depending on soil conditions at the CAFO, EPA is
proposing to require that the operator apply the manure and wastewater
either according to a nitrogen-standard or,
[[Page 3125]]
where necessary, on a phosphorus-standard. If the soil phosphorus
levels in a region are very high, the CAFO would be prohibited from
applying any manure or wastewater. EPA believes that this will improve
water quality in some production regions where the amount of phosphorus
in animal manure and wastewater being generated exceeds crop needs and
has resulted in a phosphorus build-up in the soils in those regions.
Evidence of manure-phosphorus generation in excess of crop needs is
reported in analyses conducted by USDA. Other data show that larger
operations tend to have less land to land apply manure nutrients that
are generated on-site. EPA believes that each of the co-proposed
alternatives establish a regulatory threshold that ensures that those
operations with limited land on which to apply manure are permitted.
Under the three-tier structure, EPA is proposing risk conditions that
would require nutrient management (i.e., PNPs) at operations with 300
to 1,000 AU. In addition, EPA is proposing under one co-proposed option
to require letters of certification be obtained from off-site
recipients of CAFO manure. Operations that are not defined as CAFOs,
but that are determined to be a ``significant contributor of
pollution'' by the permit authority, may be designated as CAFOs.
EPA is proposing a method for assessing whether phosphorus-based
application is necessary that is consistent with USDA's policy on
nutrient management. In all other areas, a nitrogen-based application
rate would apply. EPA's proposal grants flexibility to the states in
determining the appropriate basis for land application rates. EPA will
continue to work with USDA to evaluate appropriate measures to
distinguish proper agricultural use of manure.
Co-Permitting. The Panel reviewed EPA's consideration of requiring
corporate entities that exercise substantial operational control over a
CAFO to be co-permitted. The Panel did not reach consensus on this
issue. The Panel was concerned that any co-permitting requirements may
entail additional costs and that co-permitting cannot prevent these
costs from being passed on to small operators, to the extent that
corporate entities enjoy a bargaining advantage during contract
negotiations. The Panel thus recommended that EPA carefully consider
whether the potential benefits from co-permitting warrant the costs
particularly in light of the potential shifting of those costs from
corporate entities to contract growers. The Panel also recommended that
if EPA does require co-permitting in the proposed rule, EPA consider an
approach in which responsibilities are allocated between the two
parties such that only one entity is responsible for compliance with
any given permit requirement. This would be the party that has primary
control over that aspect of operations. Flexibility could also be given
to local permit writers to determine the appropriate locus of
responsibility for each permit component. Finally, the Panel
recommended that if EPA does propose any form of co-permitting, it
address in the preamble both the environmental benefits and any
economic impacts on small entities that may result and request comment
on its approach. If EPA does not propose a co-permitting approach, the
Panel recommended that EPA discuss the strengths and weaknesses of this
approach and request comment on it.
EPA is proposing in the rule to clarify that co-permitting is
appropriate where a corporate or other entity exercises substantial
operational control over a CAFO. Data show that some corporations
concentrate growers geographically, thus producing a high concentration
of nutrients over a limited area. EPA is leaving to the States
decisions on how to structure co-permitting. A discussion of the
strength and weaknesses of co-permitting is contained in Section
VII.C.5 with several solicitations of comment. EPA is also soliciting
comment on an Environmental Management System as a sufficient program
to meet co-permitting requirements. Please refer to Section VII.C.5 for
further discussion of Environmental Management Systems.
CNMP Preparer Requirements. The Panel reviewed EPA's consideration
of requiring permittees to have CNMPs (Comprehensive Nutrient
Management Plans) developed by certified planners. The Panel
recommended that EPA work with USDA to develop low cost CNMP
development services or allow operators to write their own plans. The
Panel was concerned about the cost of having a certified planner
develop the plans and urged EPA to continue to coordinate with other
federal, state and local agencies in the provision of low-cost CNMP
development services, and should facilitate operator preparation of
plans by providing training, guidance and tools (e.g., computer
programs).
EPA is proposing that CAFOs, regardless of size, have certified
Permit Nutrient Plans (PNPs) that will be enforceable under the permit.
The proposal states that USDA's Technical Guidance for Developing CNMPs
may be used as a template for developing PNPs. EPA believes that USDA
documentation and standards will be appropriate for use as the primary
technical references for developing PNPs at CAFOs. In the proposal, EPA
has identified certain practices that would be required elements of
PNPs in order to protect surface water from CAFO pollutant discharges.
These practices are consistent with some of the practices recommended
in USDA's CNMP guidance; however, the PNP would not need to include all
of the practices identified in the USDA guidance. As an enforceable
part of the permit, the PNP would need to be written either by a
certified planner or by someone else and reviewed and approved by a
certified planner. EPA believes it is essential that the plans be
certified by agriculture specialists because the permit writer will
likely rely to a large extent on their expertise. The plans would need
to be site specific and meet the requirements outlined in this rule.
EPA is continuing to coordinate with other regulatory agencies and with
USDA on the development of these proposed requirements. EPA has
concluded that development of the PNP is affordable to small businesses
in these sectors and will improve manure management and lead to cost
savings at the CAFO. EPA's economic analysis is provided in Section X.J
of this preamble. More detailed information on the cost to develop a
PNP is in the Development Document.
General vs. Individual Permits. The Panel reviewed EPA's
consideration of requiring individual permits for CAFOs that meet
certain criteria, or increasing the level of public involvement in
general permits for CAFOs. The Panel recommended that EPA not expand
the use of individual permits for operations with less than 1,000 AU.
EPA believes that individual permits may be warranted under certain
conditions such as extremely large operations, operations with a
history of compliance problems, or operations in environmentally
sensitive areas. Accordingly, EPA is co-proposing two options. In one
option, each State develops its own criteria, after soliciting public
input, for determining which CAFOs would need to have individual rather
than general permits. EPA is also coproposing an option that would
establish a national criteria for issuing individual permits. The
criteria identifies a threshold that represents the largest operations
in each sector. (See Section XII for a detailed discussion.)
Immature Animals. The Panel reviewed EPA's consideration to include
immature animals for all animal types in determining the total number
of
[[Page 3126]]
animal units at a CAFO. The Panel recommended that EPA count immature
animals proportionally to their waste generation. EPA is proposing to
continue to account for only the mature animals at operations where all
ages of animals are maintained (mostly dairy and hog operations). Once
an operation is covered by the existing regulations, however, all
manure and wastewater generated by immature animals that are confined
at the same operation with mature animals would also be subject to the
requirements. EPA is proposing to maintain this requirement because all
young animals are not always confined and immature populations vary
over time, whereas the mature herd is of a more constant size.
Furthermore, the exclusion of immature animals adds to the simplicity
we are seeking in this rulemaking. However, EPA is proposing to include
immature animals as subject to the regulations only in stand-alone
nursery pig and heifer operations. For stand-alone nursery pig
operations, EPA is proposing to account for immature animals
proportionate to their waste generation, as discussed in Section VIII.
Stand-alone heifer operations are included under the beef subcategory
and are subject to the proposed regulations if they confine more than
500 heifers (two-tier) or more than 300 AU, under certain conditions
(three-tier).
e. Other Recommendations. Benefits. The Panel recommended that the
EPA evaluate the benefits of the selected regulatory options and that
EPA carefully evaluate, in a manner consistent with its legal
obligations, the relative costs and benefits (including quantified
benefits to the extent possible) of each option in order to ensure that
the options selected are affordable (including to small farmers), cost-
effective, and provide significant environmental benefits. EPA has
conducted an extensive benefit analysis of all the options and
scenarios considered. The findings of the benefit analysis are found in
Section XI of this report. More detailed information is provided in the
Benefits Analysis. Section X.I presents a comparison of the annualized
compliance costs and the estimated monetized benefits.
Estimated Compliance Costs. The Panel recommended that EPA continue
to refine the cost models and consider additional information provided.
EPA has continued to refine the cost models and has reviewed all
information provided to help improve the accuracy of the models. A
summary of EPA's cost models is provided in Section X of this preamble.
More detailed information is provided in the Economic Analysis and
Development Document provided in the rulemaking record.
Public Availability of CNMP. The Panel urged EPA to consider
proprietary business concerns when determining what to make publicly
available. To the extent allowed under the law, EPA should continue to
explore ways to balance the operators' concerns over the
confidentiality of information that could be detrimental if revealed to
the operators' competitors, with the public's interest in knowing
whether adequate practices are being implemented to protect water
quality. EPA is not requiring CAFOs to submit the PNPs to the permit
authority. However, EPA is proposing that the PNPs must be available
upon the request of States and EPA. The agencies would make the plans
available to the public on request. EPA is proposing to require the
operator of a permitted CAFO to make a copy of the PNP cover sheet and
executive summary available for public review. EPA is also requesting
comment as to whether CAFOs should be able to claim these elements of
the PNP as confidential business information and withhold those
elements of the PNP from public review on that basis, or alternately,
that whether other portions of the PNP should be made available as
well.
Dry Manure. The Panel asked EPA to consider the least costly
requirements for poultry operations with dry manure management systems.
The Panel recommended that in evaluating potential requirements for dry
manure poultry operations, EPA consider the effects of any such
requirements on small entities. EPA is not mandating a specific storage
technology or practice, but is proposing a zero discharge performance
standard and a requirement that poultry operations develop and
implement a PNP. EPA is also proposing that certain monitoring and
recordkeeping requirements would be appropriate. EPA's economic
analysis is provided in Section X.J of this preamble. More detailed
cost information is provided in the Development Document.
Coordination with State Programs. The Panel recommended that EPA
consider the impact of any new requirements on existing state programs
and include in the proposed rule sufficient flexibility to accommodate
such programs where they meet the minimum requirements of federal NPDES
regulations. The Panel further recommended that EPA continue to consult
with states in an effort to promote compatibility between federal and
state programs. EPA has consulted with states. There were seven states
represented on the CAFO workgroup (see Section XII.G.1). In addition,
EPA asked for comment on the proposed options from nine national
associations that represent state and local government officials. (See
Section XIII.G.) In conducting its analyses for this rulemaking, EPA
accounted for requirements under existing state programs. A summary of
EPA's estimated costs to the NPDES Permitting Authority are presented
in Section X.G.1 and Section XIII.B.
XIII.Administrative Requirements
A. Executive Order 12866: ``Regulatory Planning and Review''
Under Executive Order 12866 [58 FR 51735, October 4, 1993], the
Agency must determine whether the regulatory action is ``significant''
and therefore subject to OMB review and the requirements of the
Executive Order. The Order defines ``significant regulatory action'' as
one that is likely to result in a rule that may:
(1) have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
(2) create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.''
It has been determined that this proposed rule is a ``significant
regulatory action'' under the terms of Executive Order 12866. As such,
this action was submitted to OMB for review. Changes made in response
to OMB suggestions or recommendations will be documented in the public
record.
B. Regulatory Flexibility Act (RFA) as amended by the Small Business
Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et
seq.
The RFA generally requires an agency to prepare a regulatory
flexibility analysis for any rule subject to notice and comment
rulemaking requirements under the Administrative Procedure Act or any
other statute unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
[[Page 3127]]
Small entities include small businesses, small organizations, and small
governmental jurisdictions.
The RFA provides default definitions for each type of small entity.
It also authorizes an agency to use alternative definitions for each
category of small entity, ``which are appropriate to the activities of
the agency'' after proposing the alternative definition in the Federal
Register and taking comment. 5 U.S.C. Sec. 601(3)-(5). In addition to
the above, to establish an alternative small business definition,
agencies must consult with the Small Business Administration (SBA)
Chief Counsel for Advocacy.
For purposes of assessing the impacts of today's rule on small
entities, small entity is defined as: (1) a small business based on
annual revenue standards established by SBA, with the exception of one
of the six industry sectors where an alternative definition to SBA's is
proposed; (2) a small governmental jurisdiction that is a government of
a city, county, town, school district or special district with a
population of less than 50,000; and (3) a small organization that is
any not-for-profit enterprise which is independently owned and operated
and is not dominant in its field.
The definitions of small business for the livestock and poultry
industries are in SBA's regulations at 13 CFR 121.201. These size
standards were updated in September, 2000. SBA size standards for these
industries define a ``small business'' as one with average revenues
over a 3-year period of less than $0.5 million annually for dairy, hog,
broiler, and turkey operations, $1.5 million for beef feedlots, and
$9.0 million for egg operations. In today's rule, EPA is proposing to
define a ``small'' egg laying operation for purposes of its regulatory
flexibility assessments under the RFA as an operation that generates
less than $1.5 million in annual revenue. Because this definition of
small business is not the definition established under the RFA, EPA is
specifically seeking comment on the use of this alternative definition
as part of today's notice of the proposed rulemaking. EPA has consulted
with the SBA Chief Counsel for Advocacy on the use of this alternative
definition. EPA believes this definition better reflects the
agricultural community's sense of what constitutes a small business and
more closely aligns with the small business definitions codified by SBA
for other animal operations. A summary of EPA's analysis pertaining to
the alternative definition is provided in Section 9 of the Economic
Analysis. A summary of EPA's consultation with SBA is provided in the
record.
In accordance with Section 603 of the RFA, EPA prepared an initial
regulatory flexibility analysis (IRFA) that examines the impact of the
proposed rule on small entities along with regulatory alternatives that
could reduce that impact. The IRFA is available for review in the
docket (see Section 9 of the Economic Analysis). This analysis is
summarized in Section X.J of this preamble. Based on available
information, there are no small governmental operations or nonprofit
organizations that operate animal feeding operations that will be
affected by today's proposed regulations.
The majority (95 percent) of the estimated 376,000 AFOs are small
businesses, as defined by SBA. Of these, EPA estimates that there are
10,550 operations that will be subject to the proposed requirements
that are small businesses under the two-tier structure. Under the
three-tier structure, an estimated 14,630 affected operations are small
businesses. The difference in the number of affected small businesses
is among poultry producers, particularly broiler operations. Section
X.J.2 provides additional detail on how EPA estimated the number of
small businesses.
Based on the IRFA, EPA is proposing concludes that the proposed
regulations are economically achievable to small businesses in the
livestock and poultry sectors. EPA's economic analysis concludes that
the proposed requirements will not result in financial stress to small
businesses in the veal, dairy, hog, turkey, and egg sectors. However,
EPA's analysis concludes that the proposed regulations may result in
financial stress to 150 to 280 small broiler operations under the two-
tier and three-tier structure, respectively. In addition, EPA estimates
that 10 to 40 small beef and heifer operations may also experience
financial stress under each of the proposed tier structures. EPA
considers these operations--comprising about 2 percent of all affected
small CAFO businesses--may be vulnerable to closure. Details of this
economic assessment are provided in Section X.J.
EPA believes that moderate financial impacts that may be imposed on
some operations in some sectors is justified given the magnitude of the
documented environmental problems associated with animal feeding
operations, as described in Section V of this document. Section IV
further summarizes EPA's rationale for revising the existing
regulations, including: (1) address reports of continued discharge and
runoff from livestock and poultry operations in spite of the existing
requirements; (2) update the existing regulations to reflect structural
changes in these industries over the last few decades; and (3) improve
the effectiveness of the existing regulations. Additional discussion of
the objectives of and legal basis for the proposed rule is presented in
Sections I through III.
Section XIII.F summarizes the expected reporting and recordkeeping
requirements required under the proposed regulation based on
information compiled as part of the Information Collection Request
(ICR) document prepared by EPA.
Section X.J.4 summarizes the principal regulatory accommodations
that are expected to mitigate future impacts to small businesses under
the proposed regulations. Under both of the co-proposed alternatives,
EPA is proposing to eliminate the ``mixed'' animal calculation for
operations with more than a single animal type for determining which
AFOs are CAFOs. As a result, smaller operations that house a mixture of
animal types where none of these animal types independently meets the
regulatory threshold are not considered CAFOs under today's proposed
rulemaking, unless they are individually designated. Additional
accommodations are being proposed under the two-tier structure. Under
the two-tier structure, EPA is proposing to establish a regulatory
threshold that would define as CAFOs all operations with more than 500
AU. EPA is also considering a two-tier alternative that would define
all operations with more than 750 AU as CAFOs. The two-tier structure
would provide relief to small businesses since this would remove from
the CAFO definition operations with between 300 AU and 500 AU (or 750
AU) that under the current rules may be defined as CAFOs. Also, under
the two-tier structure, EPA is proposing to raise the size standard for
defining egg laying operations as CAFOs. This alternative would remove
from the CAFO definition egg operations with between 30,000 and 50,000
laying hens (or 75,000 hens) that under the current rules are defined
as CAFOs, if they utilize a liquid manure management system. Additional
information on the regulatory relief provisions being proposed by EPA
is provided in Section VII of this preamble.
As required by section 609(b) of the RFA, as amended by SBREFA, EPA
also conducted outreach to small entities and convened a Small Business
Advocacy Review Panel to obtain advice and recommendations from
representatives of the small entities that potentially would be subject
to the rule's requirements. Consistent with the
[[Page 3128]]
RFA/SBREFA requirements, the Panel evaluated the assembled materials
and small entity comments on issues related to the elements of the
IRFA. A complete summary of the Panel's recommendations is provided in
the Final Report of the Small Business Advocacy Review Panel on EPA's
Planned Proposed Rule on National Pollutant Discharge Elimination
System (NPDES) and Effluent Limitations Guideline (Effluent Guidelines)
Regulations for Concentrated Animal Feeding Operations (April 7, 2000).
This document is included in the public record. As documented in the
panel report, the participants of the Small Business Advocacy Review
Panel did not identify any Federal rules that duplicate or interfere
with the requirements of the proposed regulation.
Section XII.G of this document provides a full summary of the
Panel's activities and recommendations. This summary also describes
each of the subsequent actions taken by the Agency, detailing how EPA
addressed each of the Panel's recommendations. EPA is interested in
receiving comments on all aspects of today's proposal and its impacts
on small entities.
C. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), P.L.
104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local, and tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
one year.
Before promulgating an EPA rule for which a written statement is
needed, section 205 of the UMRA generally requires EPA to identify and
consider a reasonable number of regulatory alternatives and adopt the
least costly, most cost-effective or least burdensome alternative that
achieves the objectives of the rule. The provisions of section 205 do
not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective or least burdensome alternative, if the
Administrator publishes with the final rule an explanation why that
alternative was not adopted.
Before EPA establishes any regulatory requirements that may
significantly or uniquely affect small governments, including tribal
governments, it must have developed under section 203 of the UMRA a
small government agency plan. The plan must provide for notifying
potentially affected small governments, enabling officials of affected
small governments to have meaningful and timely input in the
development of EPA regulatory proposals with significant Federal
intergovernmental mandates, and informing, educating, and advising
small governments on compliance with the regulatory requirements.
EPA has determined that today's proposed regulations contain a
Federal mandate that may result in expenditures of $100 million or more
for the private sector in any one year. Accordingly, EPA has prepared
the written statement required by section 202 of the UMRA. This
statement is contained in the Economic Analysis and also the Benefits
Analysis for the rule. These support documents are contained in the
record. In addition, EPA has determined that the rules contain no
regulatory requirements that might significantly or uniquely affect
small governments. Thus, today's rules are not subject to the
requirements of section 203 of the UMRA. Additional information that
supports this finding is provided below.
A detailed discussion of the objectives and legal basis for the
proposed CAFO regulations is presented in Sections I and III of the
preamble. A consent decree with the Natural Resources Defense Council
established a deadline of December 2000 for EPA to propose effluent
limitations for this industry.
EPA prepared several supporting analyses for the final rules.
Throughout this preamble and in those supporting analyses, EPA has
responded to the UMRA section 202 requirements. Costs, benefits, and
regulatory alternatives are addressed in the Economic Analysis and the
Benefits Analysis for the rule. These analyses are summarized in
Section X and Section XI of this preamble. The results of these
analyses are summarized below.
EPA prepared a qualitative and quantitative cost-benefit assessment
of the Federal requirements imposed by today's final rules. In large
part, the private sector, not State, local and tribal governments, will
incur the costs of the proposed regulations. Under the two-tier
structure, total annualized compliance costs to industry are projected
at $831 million (pre-tax)/$572 million (post-tax). The cost to off-site
recipients of CAFO manure is estimated at $10 million per year. Under
the three-tier structure, costs to industry are estimated at $930
million per year (pre-tax)/$658 million (post-tax), and the annual cost
to off-site recipients of manure is estimated at $11 million. This
analysis is summarized in Section X.E.1 of this preamble.
Authorized States are expected to incur costs to implement the
standards, but these costs will not exceed the thresholds established
by UMRA. Under the two-tier structure, State and Federal administrative
costs to implement the permit program are estimated to be $6.2 million
per year: $5.9 million for States and $350,000 for EPA. Under the
three-tier structure, State and Federal administrative costs to
implement the permit program are estimated by EPA at $7.7 million per
year, estimated at $7.3 million for States and $416,000 for EPA. This
analysis is summarized in Section X.G.1 of this preamble. More detailed
information is provided in the Economic Analysis. The Federal resources
(i.e., water pollution control grants) that are generally available for
financial assistance to States are included in Section 106 of the Clean
Water Act. There are no Federal funds available to defray the costs of
this rule on local governments. Since these rules do not affect local
or tribal governments, they will not result in significant or unique
impacts to small governments.
Overall, under the two-tier structure, the projected total costs of
the proposed regulations are $847 million annually. Under the three-
tier structure, total social costs are estimated at $949 million
annually.
The results of EPA's economic impact analysis show that the
percentage of operations that would experience financial stress under
each of the proposed tier structures represent 7 percent of all
affected CAFOs (Section X.F.1). This analysis is conducted without
taking into account possible financial assistance to agricultural
producers that could offset the estimated compliance costs to CAFOs to
comply with the proposed regulations, thus mitigating the estimated
impacts to these operations. Federal programs, such as USDA's
Environmental Quality Incentives Program (EQIP), and other State and
local conservation programs provide cost-share and technical assistance
to farmers and ranchers who install structural improvements and
implement farm management practices, including many of the requirements
that are being proposed today by EPA. EQIP funds are limited to
livestock and poultry operations with fewer than 1,000 animal units
(AUs), as defined by USDA, but could provide assistance to operations
with less than 1,000 AU as well as to some larger operations in the
poultry and hog sectors.
[[Page 3129]]
EPA also conducted an analysis that predicts and quantifies the
broader market changes that may result due to compliance. This analysis
examines changes throughout the economy as impacts are absorbed at
various stages of the food marketing chain. The results of this
analysis show that consumer and farm level price changes will be
modest. This analysis is summarized in Section X.F.3.
EPA does not believe that there will be any disproportionate
budgetary effects of the rules on any particular area of the country,
particular types of communities, or particular industry segments. EPA's
basis for this finding with respect to the private sector is addressed
in Section 5 of the Economic Analysis based on an analysis of community
level impact, which is summarized in Section X.G.2 of the preamble. EPA
considered the costs, impacts, and other effects for specific regions
and individual communities, and found no disproportionate budgetary
effects. EPA's basis for this finding with respect to the public sector
is available in the record.
The proposed mandate's benefits are primarily in the areas of
reduced health risks and improved water quality. The Benefits Analysis
supporting the rulemaking describes, qualitatively, many such benefits.
The analysis then quantifies a subset of the benefits and, for a subset
of the quantified benefits, EPA monetizes (i.e., places a dollar value
on) selected benefits. EPA's estimates of the monetized benefits of the
proposed regulations are estimated to range from $146 million to $165
million under the two-tier structure. Under the three-tier structure,
estimated benefits range from $163 million to $182 million annually.
This analysis is summarized in Section XI of this preamble.
EPA consulted with several States during development of the
proposed rules. Some raised concerns that the national rule would have
workload and cost implications for the State. Some States with
implementation programs underway or planned want to have their programs
satisfy the requirements of the proposed rule. Other States expressed
concerns about the loss of cost-share funds to AFOs once they are
designated as point sources. There were additional comments regarding
inconsistencies with the Unifed Strategy. See Section IX.A for a
discussion of alternative State programs, Section X.G for a discussion
of State costs and the workload analysis, Sections III.D and VII.B for
a discussion of consistency with the AFO Strategy, and Section IX.E for
a discussion of cost-share funds.
For the regulatory decisions in today's rules (allowing for the
options reflected by the co-proposal), EPA has selected alternatives
that are consistent with the requirements of UMRA in terms of cost,
cost-effectiveness, and burden. The proposal is also consistent with
the requirements of the CWA. This satisfies section 205 of the UMRA. As
part of this rulemaking, EPA had identified and considered a reasonable
number of regulatory alternatives. (See Section VII for NPDES Scenarios
and Section VIII for effluent guidelines technology options). Section
X.E compares the costs across these alternatives. Section X.H provides
a cost-effectiveness analysis that shows that the proposed BAT Option
is the most cost-effective of these alternatives. Sections VII and VIII
of the preamble are devoted to describing the Agency's rationale for
each regulatory decision. Section IV of this document further
summarizes EPA's rationale for revising the existing regulations.
D. Executive Order 13045: ``Protection of Children from Environmental
Health Risks and Safety Risks''
Executive Order 13045 (62 FR 19885, April 23, 1997) applies to any
rule that: (1) Is determined to be ``economically significant'' as
defined under E.O. 12866, and (2) concerns an environmental health or
safety risk that EPA has reason to believe may have a disproportionate
effect on children. If the regulatory action meets both criteria, the
Agency must evaluate the environmental health and safety effects of the
planned rule on children, and explain why the planned regulation is
preferable to other potentially effective and reasonably feasible
alternatives considered by the Agency.
This proposed rule is subject to E.O. 13045 because it is an
economically significant regulatory action as defined by E.O. 12866,
and we believe that the environmental health or safety risks addressed
by this action have or may have disproportionate effects on children.
Accordingly, we have evaluated, to the extent possible, the
environmental health or safety effects of pollutants from CAFOs on
children. The results of this evaluation are contained in sections V.C
and XI.B of the preamble as well as the Environmental Assessment and
Benefits Assessment (these documents have been placed in the public
docket for the rule).
The Agency believes that the following pollutants have or may have
a disproportionate risk to children: nitrates, pathogens, trace metals
such as zinc, arsenic, copper, and selenium, pesticides, hormones, and
endocrine disruptors. These health risks are summarized in Section V.C
and described in detail in the Environmental Assessment. With the
exception of nitrates in drinking water, the Agency has very little of
the detailed information necessary to conduct an assessment of these
risks to children for these pollutants. The Agency solicits risk and
exposure data and models that could be used to characterize the risks
to children's health from CAFO pollutants.
There is evidence that infants under the age of six months may be
at risk from methemoglobinemia caused by nitrates in private drinking
water wells, typically when ingesting water with nitrate levels higher
than 10 micrograms/liter. The Agency only has enough information to
determine that a chronic dose of 10 micrograms/liter may cause an
adverse health effect, but there is no dose-response function for
nitrates, nor does the Agency have other information necessary to
conduct a detailed health risk assessment (for example, the actual
number of cases of methemoglobinemia are not reported and are thus
highly uncertain). Instead, the Agency has estimated the reduction in
the number of households that will be exposed to drinking water with
nitrate levels above 10 micrograms/liter in Chapter 8 of the Benefits
Assessment (noting that the Agency does not have information on the
number of households exposed to nitrates that also have infants). The
Agency assumes that nitrate levels lower than 10 micrograms/liter pose
no risk of methemoglobinemia.
The Agency estimates that there are approximately 13.5 million
households with drinking water wells in counties with animal feeding
operations. Of these, the Agency estimates that approximately 1.3
million households are exposed to nitrate levels above 10 micrograms/
liter. The Agency further estimates that approximately 166,000
households would have their nitrate levels brought below 10 micrograms/
liter under the two-tier structure. Approximately 161,000 households
would have their nitrate levels brought below 10 micrograms/liter under
the three-tier structure. Furthermore, the Agency estimates that
options more stringent than those proposed would have small incremental
changes in pollutant loadings to groundwater (see the Technical
Development Document). Thus, the Agency expects the number of
additional households protected from nitrate levels greater than 10
micrograms/liter would be negligible under more stringent options. The
Agency therefore does not believe that requirements more stringent than
those
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proposed would provide meaningful additional protection of children's
health risks from methemoglobinemia. Furthermore, the Agency is only
able to regulate groundwater quality through NPDES permits if there is
a direct hydrologic connection to surface water (see Section
VII.C.2.j).
Methemoglobinemia is only one children's health risk caused by CAFO
pollutants, as discussed above, in Section V.C, and elsewhere in the
record. It was the only risk to children's health which the Agency was
able to quantify (if incompletely) in any way. The options considered
by the Agency, as well as the rationale for the proposed options, are
discussed in detail in Sections VII and VIII of this preamble. To the
extent possible under the authority of the CWA, EPA chose options that
were protective of environmental and human health, including children's
health. These option selections were based on the best risk assessments
possible given the limited data available. The public is invited to
submit or identify peer-reviewed studies and data, of which the Agency
might not be aware that assessed results of early life exposure to
nitrates or any other pollutant discharged by CAFOS.
E. Executive Order 13084: Consultation and Coordination With Indian
Tribal Governments
Under Executive Order 13084, EPA may not issue a regulation that is
not required by statute that significantly or uniquely affects the
communities of Indian tribal governments, and that imposes substantial
direct compliance costs on those communities, unless the Federal
government provides the funds necessary to pay the direct compliance
costs incurred by the tribal governments, or EPA consults with those
governments. If EPA complies by consulting, Executive Order 13084
requires EPA to provide to the Office of Management and Budget, in a
separately identified section of the preamble to the rule, a
description of the extent of EPA's prior consultation with
representatives of affected tribal governments, a summary of the nature
of their concerns, and a statement supporting the need to issue the
regulation. In addition, Executive Order 13084 requires EPA to develop
an effective process permitting elected and other representatives of
Indian tribal governments ``to provide meaningful and timely input in
the development of regulatory policies on matters that significantly or
uniquely affect their communities.''
Today's rule does not significantly or uniquely affect the
communities of Indian tribal governments nor imposes substantial direct
compliance costs on them. First, there are currently no tribal
governments that have been authorized to issue NPDES permits. Thus,
there will be no burden to tribal governments. Second, few CAFO
operations are located on tribal land. Therefore, compliance costs to
tribal communities will not be significant. Accordingly, the
requirements of section 3(b) of Executive Order 13084 do not apply to
this rule.
However, EPA has let tribal communities know about this rulemaking
through a presentation of potential rule changes at the National
Environmental Justice Advisory Committee meeting in Atlanta in June,
2000 and through notices in tribal publications.
F. Paperwork Reduction Act
The information collection requirements in this proposed rule have
been submitted for approval to the Office of Management and Budget
(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. An
Information Collection Request (ICR) document has been prepared by EPA
(ICR No. 1989.01) and a copy may be obtained from Sandy Farmer by mail
at Collection Strategies Division; U.S. Environmental Protection Agency
(2822); 1200 Pennsylvania Ave., NW, Washington, DC 20460, by email at
farmer.sandy@epamail.epa.gov, or by calling (202) 260-2740. A copy may
also be downloaded off the internet at http://www.epa.gov/icr.
Today's proposed rule would require all animal feeding operations
(AFOs) that meet the proposed CAFO definition to apply for a permit and
develop a certified permit nutrient plan and to implement that plan.
Implementation of the plan includes the cost of recording animal
inventories, manure generation, field application of manure and other
nutrients (amount, rate, method, incorporation, dates), manure and soil
analysis compilation, crop yield goals and harvested yields, crop
rotations, tillage practices, rainfall and irrigation, lime
applications, findings from visual inspections of feedlot areas and
fields, lagoon emptying, and other activities on a monthly basis.
Records may include manure spreader calibration worksheets, manure
application worksheets, maintenance logs, and soil and manure test
results.
The average annual burden for this rule covering both the private
and public sector for the three-tiered option is 1.6 million hours and
$37 million annually; for the two-tiered option, burden is 1.2 million
hours annually at $29 million annually. These values do not account for
State programs that may already be requiring some of the recordkeeping
and reporting requirements already. Thus, this burden would be an
overestimate to the degree that some States already require such
actions.
For the three-tiered structure, the average annual CAFO burden is
estimated to be 80 hours with the frequency of responses based on
requirements ranging from two times per year to once every five years.
There are 19,519 likely CAFO respondents and 28 states. Under this
scenario, the state annual average burden is estimated at 3,214 hours.
The average annual operation and maintenance costs are estimated at
$4.3 million for CAFOs and $60,000 for States; labor costs are
estimated at $28.9 million for CAFOs and $2.6 million for States;
capital costs are estimated at $1.6 million for CAFOs and $0.0 for
States.
For the two-tiered structure, CAFO average annual burden per
respondent is 81 hours and the State burden is 2,500 hours. There are
15,015 likely CAFO respondents and 28 states. The 28 state count is an
average over three years assuming that half the delegated states will
have a program established in year one, half in year 2 and all in year
three. Average annual operation and maintenance costs are $3.3 million
for CAFOs and $60,000 for States; labor costs are $22.6 million for
CAFOs and $2.0 million for States; capital costs are $1.3 million for
CAFOs and $0.0 for States.
The burden required for this rulemaking will allow EPA to determine
whether a CAFO operator is monitoring his waste management system in an
environmentally safe way. This data will be used to assess compliance
with the rule and help determine enforcement cases. The Permit Nutrient
Plan data requirements ensure that the CAFO owner has established the
appropriate application rate for their fields on which they spread
manure; is providing adequate operation and maintenance for the storage
area and feedlot, and is meeting the requirements to keep agriculture
waste out of the Nation's waters. The information requested herein is
mandatory (33 U.S.C. 1318 (Section 308 of the Clean Water Act)). Twqhe
Agency is requesting comment in this proposal on how much, if any of
this information should be confidential business information.
Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, disclose or provide
information to or for a Federal
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agency. Burden estimates include the time needed to review
instructions; develop, acquire, install, and utilize technology and
systems for the purposes of collecting, validating, and verifying
information, processing and maintaining information, and disclosing and
providing information; adjust the existing ways to comply with any
previously applicable instructions and requirements; train personnel to
be able to respond to a collection of information; search data sources;
complete and review the collection of information; and transmit or
otherwise disclose the information. Additional burden has been
estimated for off-site recipients who must certify that they are
applying manure in an appropriate manner.
An Agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless the collection form
displays a currently valid OMB control number. The OMB control numbers
for EPA's regulations are listed in 40 CFR Part 9 and 48 CFR Chapter
15.
Comments are requested on the Agency's need for this information,
the accuracy of the provided burden estimates, and any suggested
methods for minimizing respondent burden, including through the use of
automated collection techniques. Send comments on the ICR to the
Director, Collection Strategies Division; U.S. Environmental Protection
Agency (2822); 1200 Pennsylvania Ave., NW, Washington, DC 20460; and to
the Office of Information and Regulatory Affairs, Office of Management
and Budget, 725 17th St., N.W., Washington, DC 20503, marked
``Attention: Desk Officer for EPA.'' Include the ICR number in any
correspondence. Since OMB is required to make a decision concerning the
ICR between 30 and 60 days after [January 12, 2001 Federal Register], a
comment to OMB is best assured of having its full effect if OMB
receives it by February 12, 2001. The final rule will respond to any
OMB or public comments on the information collection requirements
contained in this proposal.
G. Executive Order 13132: ``Federalism''
Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and local officials in the
development of regulatory policies that have Federalism implications.''
``Policies that have Federalism implications'' is defined in the
Executive Order to include regulations that have ``substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.''
This proposed rule does not have Federalism implications. It will
not have substantial direct effects on the States, on this relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government,
as specified in Executive Order 13132. EPA estimates that the average
annual impact on all authorized States together is $6.0 million. EPA
does not consider an annual impact of $6 million on States a
substantial effect. In addition, EPA does not expect this rule to have
any impact on local governments.
Further, the revised regulations would not alter the basic State-
Federal scheme established in the Clean Water Act under which EPA
authorizes States to carry out the NPDES permitting program. EPA
expects the revised regulations to have little effect on the
relationship between, or the distribution of power and responsibilities
among, the Federal and State governments. Thus, Executive Order 13132
does not apply to this rule.
In the spirit of Executive Order 13132, and consistent with EPA
policy, EPA consulted with representatives of State and local
governments in developing this proposed rule. EPA sent a summary
package outlining the proposed changes to the State and local
associations that represent elected officials including the National
Governor's Association, National Conference of State Legislators, U.S.
Conference of Mayors, Council of State Governments, International City/
County Management Association, National Association of Counties,
National Association of Towns and Townships, and County Executives of
America. In addition, as discussed in Section XII.F., there was State
representation on the CAFO Regulation Workgroup.
EPA received four responses from these national associations, the
National Governor's Council, the National League of Cities, the
National Council of State Legislators and the National Association of
Conservation Districts. EPA also received a letter from the Governor of
Delaware and the Delaware Congressional delegation. The National
Governor's Association (NGA), the National League of Cities (NLC) and
the National Association of Conservation Districts (NACD) disagree with
EPA's assessment that the rule would have minimal impact on the States.
Except for this issue, the NLC supported the rule package especially
the coverage of poultry and immature animals, the clarification of
stormwater runoff exemptions, the lower threshold, and the seven
strategic issues EPA listed to address pollution from animal feeding
operations. NLC encouraged EPA to exercise its authority to issue NPDES
permits where a delegated State has not taken appropriate action.
NGA and Delaware want the flexibility to design functionally
equivalent programs. NGA and NACD expressed concern regarding lowering
the threshold as this would bring in more entities to be permitted and
the States already have a permit backlog. In addition, they are
concerned that 319 and EQIP funds will no longer be available to
operations that are defined as CAFOs. Another concern is the
elimination of the 25 year/24 hour exemption. NGA comments address the
burden on the State permitting authority (backlog issue) and the
unfairness of facilities that work with states to eliminate discharges
would still have to get a permit. On the issue of adequate public
involvement in general permits as well as the site specific
requirements of the Effluent Limitation Guideline, NGA is concerned the
advantage of general permits as a time saver for the states may be
lost. In response to NGA's concerns, EPA met with NGA and discussed the
package and its potential impacts. EPA, also upon request, met with the
National Association of State Legislators to review the package and
answer their questions. (See Section IX for discussion of alternative
State programs. See Section VII.B for a discussion of rule scope. See
Section X.G for costs to permitting authorities. See Section VII.C for
discussion of the 25 year/24 hour storm exemption. See Section VII.E
for discussion of public involvement.)
The primary concern raised by the States represented on the CAFO
Regulation Workgroup was to clarify and simplify the rules to make them
more understandable and easier to implement. Many of the proposed
changes were made with this objective in mind. Also, the States wanted
EPA to accept functionally equivalent State programs. To address this
concern, as stated in the Joint Unified USDA/EPA AFO Strategy (see
``Strategic Issue #3''), where a State can demonstrate that its program
meets the requirements of an NPDES program consistent with 40 CFR Part
123, EPA is proposing to amend the current NPDES authorization to
recognize the State program. In addition, States were concerned about
the cost of implementing any changes to the program. EPA believes the
costs to the States for implementing this
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proposed rule will not be high. EPA is assuming that all States will
adopt the sample general permit. Some States already have a general
permit that would just need to be modified.
In the spirit of Executive Order 13132, and consistent with EPA
policy to promote communications between EPA and State and local
governments, EPA specifically solicits comment on this proposed rule
from State and local officials.
H. Executive Order 12898: ``Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations''
The requirements of the Environmental Justice Executive Order are
that* * *'' EPA will * * * review the environmental effects of major
Federal actions significantly affecting the quality of the human
environment. For such actions, EPA reviewers will focus on the spatial
distribution of human health, social and economic effects to ensure
that agency decisionmakers are aware of the extent to which those
impacts fall disproportionately on covered communities.'' EPA has
determined that this rulemaking is economically significant. However,
the Agency does not believethis rulemaking will have a disproportionate
effect on minority or low income communities. The proposed regulation
will reduce the negative affects of CAFO waste in our nation's waters
to benefit all of society, including minority communities.
The National Environmental Justice Advisory Committee (NEJAC)
submitted a set of recommendations to EPA regarding CAFOs that included
recommendations to be addressed in revisions to EPA's regulations for
CAFO's. Each recommendation is addressed below.
The NEJAC recommended that EPA ``promulgate new, effective
regulations that set uniform, minimum rules for all AFOs and CAFOs in
the United States.'' In response, EPA believes that today's proposed
rule revisions would represent new, uniform and effective requirements
for CAFOs (AFOs by definition are not point sources and so would not be
subject to today's proposed CAFO rules).
The Committee requested that EPA impose a zero discharge standard
on runoff from land application of CAFO wastes. For the reasons
described in section VIII. C.3., BAT Options Considered, of today's
notice, EPA believes it is not appropriate to set a technology-based
standard at this level with respect to land application runoff.
NEJAC requested that EPA prohibit or restrict the siting of
facilities in certain areas such as flood plains. Siting of private
industry is primarily a local issue and should be addressed at the
local level. Discharge limitations proposed today should, however,
discourage operators from locating in flood plains. Proposed
requirements for swine, veal and poultry CAFOs would require no
discharge under any circumstances. Beef and dairy CAFOs would have to
comply with zero discharge except in the event of a chronic or
catastrophic storm which exceeds the 25 year, 24 hour storm. If
existing operations are located in flood plains it is in their best
interest to divert uncontaminated storm water away from their
production area to avoid inundation of the production area and
potential breaching of their manure storage system during flood events.
EPA proposes to prohibit manure application to crop or pasture land
within 100 feet of surface waters, tile intake structures, agricultural
drainage wells, and sinkholes which will also minimize the risk of
discharge under flood conditions.
NEJAC requested monitoring requirements in the rule. EPA has
proposed an appropriate set of monitoring requirements to be included
in CAFO permits (See section XIII of today's notice).
NEJAC also requested public notification of the construction or
expansion of CAFOs or issuance of permits. Under today's proposed
rules, EPA would require individual permits, which are subject to
individual public notice and comment, for facilities that are located
in an environmentally sensitive area; have a history of operational or
compliance problems; are an exceptionally large or significantly
expanding facility; or where the Director is aware of significant
public concern about water quality impacts from the CAFO. For all other
facilities that are to be covered by general permits, for purposes of
public notice, today's proposal would require the permitting authority
to publish on a quarterly basis its receipt of Notices of Intent (NOIs)
submitted by CAFOs.
NEJAC further recommended that EPA require States and tribes to
develop inspection programs that allow unannounced inspections of all
CAFOs and to make these programs available for public comment. This
concern is already addressed by existing Clean Water Act requirements.
Specifically, under the Act, EPA may conduct unannounced inspections,
and States must have the authority to inspect to the same extent as
EPA. Although there is no specific requirement that State inspection
plans be made publicly available, they may be available under State
law.
NEJAC requested that EPA require the ado